Employment Status Manual

Guide to determining status: contracts - getting at the true terms

In order to establish the true terms and conditions find out what happens in practice. You can then compare this with the stated terms and conditions to see if they match. This should be done for each contractual term in turn. If what happens in practice does not follow the contractual term then there are three possible reasons for the difference:

the stated term has been subject to an agreed variation, or

the stated term is a ‘sham’ or ‘pretence’, or

the stated term does in fact govern the relationship but in practice the contract has not been followed to the letter.

Where 1. and 2. apply, it is what happens in practice that will determine employment status. Where 3. applies, it is the stated contractual term that is relevant.

You should seek explanations from both the engager and the worker to establish whether there are any differences and the reason for those differences. Also consider the nature of the differences and whether any other sources of information/ documentation may assist. The more information you can find - particularly any documentary evidence - the better are your chances of understanding the true position.